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Staff at 4uBusiness have been warned they face job losses following a decision to merge the business with Phones4u, both of which are owned by telecoms entrepreneur John Caudwell.

Insiders have told The Register that staff "are leaving in droves" and that morale has hit rock bottom. They blame the impending sale of The Caudwell Group for the job losses, claiming that people are "unhappy" with the way they've been treated.

At this stage it's not known how many people are facing the axe at 4uBusiness, which employs some 400 people.

A spokesman for The Caudwell Group declined to say exactly how many jobs were under threat, but he told us the business is "under review" and that a consultation is being carried out with staff as the firm looks to merge 4uBusiness and Phones4u.

"There are lots of synergies between 4uBusiness and Phones4u and we want to capitalise on those synergies," he told us, adding that back office jobs are most likely to be targeted.

News of the job losses comes as the sale of the Caudwell empire appears to be nearing its final stages.

Caudwell flogged its fixed line phone business - Caudwell Communications - to UK ISP Pipex earlier this year, while the sale of the rest of the group - including Phones4u and mobile handset and accessories distributors 20:20 and Dextra - is reportedly just weeks away.

Earlier this month The Times reported that CVC CAPITAL and Bain Capital were "neck-and-neck in the bidding war" for Caudwell's phone empire after a third suitor dropped out.

All the reports to date have suggested Caudwell wants £1bn for his business, although there remains some doubts as to whether those in the frame are prepared to pay that much. ®